[Congressional Record Volume 150, Number 2 (Wednesday, January 21, 2004)]
[Extensions of Remarks]
[Pages E31-E32]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




      INTRODUCTION OF THE PRESERVING MEDICARE FOR ALL ACT OF 2004

                                 ______
                                 

                        HON. BENJAMIN L. CARDIN

                              of maryland

                    in the house of representatives

                      Wednesday, January 21, 2004

  Mr. CARDIN. Mr. Speaker, I rise to introduce legislation to help 
fulfill the promise made by Congress and the President to our seniors. 
The ``Preserving Medicare for All Act of 2004'' begins with the 
framework of HR 1, which was passed in the last days of our first 
session. But it corrects the legislation's structural defects that will 
result in more harm than help for our Medicare beneficiaries.
  Over the past few years, I have met with thousands of seniors in my 
district about Medicare and their need for prescription drug coverage. 
They brought me their empty pill bottles and their pharmacy receipts. 
With the highest out-of-pocket costs of any age group in the country, 
they and millions of other seniors across the nation were looking to 
Congress for real prescription drug coverage that would give them 
substantial help with their drug costs. They wanted their drug benefit 
to be provided like other benefits covered by Medicare--administered by 
the Centers for Medicare and Medicaid Services, with a guaranteed 
benefit, universally available regardless of where they live, for it 
not to jeopardize existing coverage, and yes, they wanted the choice of 
their own doctor and hospital and the freedom to choose a private 
health plan if they prefer that option.
  I believe that a clear majority of the House and Senate wanted to 
enact legislation that met our seniors' needs. Unfortunately, the bill 
that moved through Congress failed to provide seniors with what they 
needed or expected. The plan that became law will not be administered 
by CMS but by private insurers. The government is prohibited from using 
the purchasing power of 40 million beneficiaries to lower drug prices. 
There will be no guaranteed benefit, but rather an ``actuarially 
equivalent'' benefit whose components insurance companies can 
manipulate to discourage high-cost seniors from enrolling. It will not 
be universal, because these insurers can offer different coverage in 
different areas of the country. It will jeopardize existing coverage; 
the Congressional Budget Office has estimated that 2.7 million 
retirees--half of whom have annual incomes of less than $30,000--will 
lose the drug benefits they now enjoy as a result of insufficient 
subsidies to employers. Under the guise of ``choice'' and 
``competition,'' this bill gives an extra $12 billion to managed care 
plans, which are already reimbursed at rates one-fifth higher than fee-
for-service Medicare. This so-called ``stabilization fund'' and a 
premium support demonstration project are not designed to offer choice, 
but instead to lure younger, healthier seniors away from traditional 
Medicare and into private plans. These features of the bill do not save 
money, according to the Congressional Budget Office's estimate. 
Instead, scarce dollars that could be used to provide a better drug 
benefit are used

[[Page E32]]

to ensure profits for health plans. Those beneficiaries who remain in 
fee-for-service Medicare will be isolated in an underfunded program and 
they will see their premiums skyrocket as a result of phony 
``competition.'' Finally, the new law includes a ``cost containment'' 
provision that actually shifts rather than contains costs. By combining 
the Part A and Part B Trust Funds and creating a new definition of 
insolvency that caps Medicare's use of general revenues at 45 percent 
of total Medicare costs, this provision would force government to cut 
benefits or raise payroll taxes if this limit is exceeded. More than 
any other element of the new law, this provision would undermine the 
entire Medicare system as we know it, shifting the burden of the 
program onto those least able to afford it.

  The bill I am introducing today will modify these damaging aspects of 
the new Medicare law. First it will authorize the HHS Secretary to use 
the purchasing power of 40 million seniors and disabled Americans to 
negotiate lower drug prices. Second, it will guarantee seniors the 
choice of a nationally available, defined benefit within Medicare. The 
premium, deductible, copays and stoploss will be set by law, not by 
private insurers. Third, my bill will fully reimburse employers for the 
cost of qualified retiree drug coverage and it will permit their costs 
to count toward seniors' catastrophic limits. Fourth, it will repeal 
the premium support demonstration and help ensure that Medicare remains 
a national program with equal access for all seniors. Fifth, it will 
eliminate the ``stabilization'' fund for private health insurers and 
dedicate these funds to strengthening the traditional Medicare program 
for seniors. Finally, it will eliminate the ``cost containment'' 
provision of the bill, which will harm both working families, seniors, 
and health care providers.
  Mr. Speaker, the Medicare prescription drug provisions of this bill 
will not take effect until 2006. We have time to fix the structural 
problems that prevent this law from benefitting today's beneficiaries 
and those who will depend on Medicare in future years. I urge my 
colleagues to support this effort and help keep the promises we've made 
to our seniors.

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